Omnicare, Inc. v. Laborers Dist. Council Constr. Industry Pension Fund (13-435)
argument 13-435Omnicare, Inc. v. Laborers Dist. Council Constr. Industry Pension Fund
Supreme Court of the United States
1h 1m
5 speakers
8 chapters
transcribed 6 days ago
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Transcript
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Transcript generated automatically by AI and may contain errors.
What is the legal significance of Section 11 of the Securities Act in this case?
We'll hear argument next this morning. uh in case thirteen four four four four four hundred thirty five, Omnicare Incorporated versus the Laborers District Council construction industry pension fund. Mr. Shamb again.
Thank you, Mr. Chief Justice, and may it please the court. Like other provisions of the Federal Securities Laws, Section eleven of the Securities Act imposes liability only for untrue or misleading statements of material fact. The only fact conveyed by a statement of opinion or belief is the fact that the Speaker held the stated belief. As this court concluded in Virginia Bank Shares versus Sandberg, a statement of opinion or belief can therefore be actionable only if the speaker did not actually hold the stated belief. In the decision under review, the Sixth Circuit, alone among the Courts of Appeals, concluded that this Court's reasoning in Virginia bank shares did not apply to a claim under Section eleven, even though Section eleven contains a materially identical falsity requirement to the provision at issue there.
Neither the Sixth Circuit's interpretation, nor those of respondents or the government, can be reconciled either with the plain language of Section eleven. Or with this court's decision in Virginia Bank share.
So if if I say or the company says in a pros uh prospectus, um uh we believe that we have three point five million units of inventory in our secret inventory uh warehouse. So long as they say we believe they can't you know, it turns out they have none, that's all right, they're still protected.
I think that that would probably be a statement of opinion, but it is much closer to the line between statements of opinion and statements of fact. Really you think
it's an open question if they say it's a very precise number for something that only they know anything about and it's wildly off. You think they're protected or maybe simply by saying we believe?
Well, I I think that the reason why I think it's a close question as to whether or not that would be a statement of opinion is simply because The second restatements definition of what constitutes a statement of opinion, which we think is a useful guide, includes not just statements on matters of judgment, like the statements we have at issue here, but also statements that express uncertainty about factual matters. And I think in your hypothetical, Mr. Chief Justice, you could view that statement as being the equivalent of a factual statement that along the lines of we have approximately three million units. Or widgets in our inventory, such that if they had nowhere near that, that statement would be an objectively false statement of the same.
I suppose
it is actually disputed, an expert expert, a museum expert on archaeological Mission. says it is my opinion that those bones in that mountain are of a diplodocus and not a triceptaris. Now wouldn't you have thought That at least he'd looked into it. But at least he'd seen the bones. You see it's absolutely open. It is a matter of opinion. But there's some things implied. If you'd learned later he'd been in a bar all night and had never even seen or heard one word about what the bones were like. Wouldn't you think he had issued a misrepresentation?
So Justice Breyer, first that would clearly be a statement of opinion because it's a statement on a matter of judgment.
Yes.
Our view is that where the speaker does not say anything about the basis for its opinion, the only fact that is being conveyed is the fact of the speaker's belief. Yes, and I just Yes, and I just
produced an example, because I knew that was your view, and what I would look for uh was an example where your view doesn't seem quite so reasonable. And and that was why I said it doesn't seem reasonable there, because I think any listener would think that the archaeologist had not been spending all night in the bar, but rather had at least looked at the bones or done some basic examination. And so what I That is the point I want you to address yourself to. Why is that statement I just made wrong?
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Chapters
8 chapters
1
What is the legal significance of Section 11 of the Securities Act in this case?
0:01–7:50
2
How does the Court interpret statements of opinion versus statements of fact under Section 11?
7:50–15:05
3
When can a statement of belief be considered actionable as a false statement?
15:05–23:21
4
What role does the “reasonable basis” standard play in determining liability?
23:21–30:44
5
How do the parties argue about the need for subjective disbelief versus objective falsity?
30:44–38:42
6
What are the arguments regarding omissions and material facts in registration statements?
38:42–45:53
7
How might the Supreme Court’s decision affect the SEC’s enforcement authority?
45:53–53:57
8
What are the potential outcomes for the Sixth Circuit’s ruling on remand or reversal?
53:57–1:01:21